State Attorneys General Urge FHFA to Terminate End Title Waiver Pilot
Attorneys General Request End to Experiment That Weakens Mortgage Lending Standards
In a strongly worded letter sent to the Federal Housing Finance Agency (FHFA), a coalition of 20 state attorneys general urged the agency to terminate the end title waiver pilot program. The pilot program, which was launched in 2021, allows Fannie Mae and Freddie Mac to purchase mortgages from lenders without requiring the borrower to have title insurance.
Concerns about Increased Risk and Consumer Protection
The attorneys general cited concerns that the pilot program could lead to increased risk for both lenders and borrowers. Title insurance protects lenders against financial losses if there are any problems with the title to the property. Without title insurance, lenders may be more hesitant to make loans, and borrowers may have difficulty obtaining financing.
The attorneys general also argued that the pilot program could harm consumers by reducing their ability to protect themselves against title defects. Title defects can include liens, easements, or other claims against the property that can affect its value or ownership.
Request for Immediate Action
The attorneys general urged the FHFA to take immediate action to terminate the pilot program. They argued that the program has not been shown to have any benefits and that it poses significant risks to consumers and the housing market.
Specific Issues Raised by the Attorneys General
Conclusion: Call for Open and Transparent Process
The attorneys general concluded their letter by calling for an open and transparent process to evaluate the pilot program and its impact. They urged the FHFA to solicit input from all stakeholders, including consumers, lenders, and title insurers, before making any final decisions.
Kind regards J. Ross.
